Won’t be Fooled Again! Ha!

Please see this article from today’s Newser:

(Newser)  That whole “subprime crisis” hasn’t scared banks away from the lucrative world of subprime lending. The nation’s top subprime lenders—like Capital One, GM Financial, HSBC, and JPMorgan Chase—are all trying to woo back less-creditworthy borrowers, who tend to rack up late fees while paying rates as high as 29%, the New York Timesreports. “It’s clear that we are returning to business as usual,” said a former Federal Reserve regulator. But that’s not entirely true; the focus hasn’t yet shifted to mortgages, it’s on auto loans.

Auto loans were left largely unaffected by new post-crisis regulations, and the market for bundled auto loan securities is expanding—so much so that Moody’s last year issued a report that it was growing “too much too fast.” In the fourth quarter of 2011, 23% of new auto loans were subprime. But lenders are also eager to roll out credit cards: In December, 1.1 million new cards were issued to people with damaged credit, the Times notes.

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Now see the post I wrote in 2008:

Where Were You in ’32?

December 5, 2008 — Stephen Brooks

<rant>

Are you a big-3 American automobile manufacturer?  Are you suddenly faced with a huge inventory of gas-guzzling SUVs that no-one wants to buy anymore?   Are you asking your federal government for a $24 billion to save your skins?  Here’s the answer to your woes!

I wonder if they’re doing credit checks on the people who take advantage of this offer, or if it’s another sub-prime crisis in the making.  “Sorry about losing the house, honey, but look at this great new truck I got!”  Three months later: “Sorry about losing the truck, honey, but look at this massive federal deficit our children got!”

It took about 40 years for people to forget the lessons of the Great Depression and start using credit cards and other, progressively more inventive, ways to spend more money than they had.  That’s what fueled the roaring ’80s until the crash in ’87.  Then people did the same thing, except with tech stocks in the ’90s, until the bubble burst.  And now the present sub-prime fiasco.  It has always been a case of too many people buying something which is going to decline in value — with someone else’s money.  Which is exactly what Ford is offering you now.

</rant>